Increase is a “long-needed infusion,” says former department official

This Thursday, June 8, 2017, file photo shows the U.S. Treasury Department building in Washington.
Photo:
Associated Press

The U.S. Treasury Department wants a 30% boost in funding for its counter-terrorism office, a reflection of the increased use over the years of financial tools to address national-security threats.

The $159 million request, part of the Trump administration's budget plan for the 2019 fiscal year, follows years of flat funding for the Office of Terrorism and Financial Intelligence, known as TFI. As part of the requested increase in funding, the office also seeks nearly 100 additional employees, a 21% jump.

The office's role in protecting U.S. national security "has grown dramatically" over the last several years, according to a Treasury Department budget request document. In addition to its counter-terrorism efforts, it also administers and enforces U.S. sanctions programs, and protects the U.S. and international financial systems from abuse.

Former U.S. officials told lawmakers in January that increasing funding for sanctions enforcement, a key function of the office, was an imperative.

Concerns over limited funding for the TFI office have been a recurring issue for years as its mandate grew.

The administration's budget request “is a long-needed infusion,” said David Murray, a former senior adviser to the undersecretary of Treasury for terrorism and financial intelligence. “The team has been stretched thin for quite some time, and it’s heartening to see them getting more resources,” he said.

More resources would make sanctions and other functions of the office more effective, Mr. Murray added, as the Treasury will be better positioned to pursue evaders and close loopholes that bad actors exploit to gain access to the U.S. financial system.

The office’s work “is extremely time and labor intensive,” he said, noting that its sanctions and other actions are most successful “when they are backed up by thorough analysis and extensive diplomacy.” Mr. Murray now works as a vice president for the Financial Integrity Network, a Washington, D.C.-based organization that advises governments and companies on illicit-finance threats.

The bulk of the additional staff and funding, according to the budget request, is directed toward enforcing
U.S. sanctions on North Korea and ramping up the Terrorist Financing Targeting Center. Other programs overseen by the office may get funding increases as well, however.

"These resources will ensure that TFI has sufficient staff, remains agile, innovative and strategic, enhances its infrastructure and analytic capability, and is able to support new initiatives and expanded authorities," the budget document said.

The North Korea effort would receive an additional 69 staffers and $15.2 million in funding. The Treasury document calls "recent provocations" by North Korea "an urgent threat to our national security," saying the request "is necessary to continue to maximize economic pressure and support the administration's priorities to fight nuclear proliferation."

The terrorism finance center, which is based in Saudi Arabia as part of an agreement between the U.S. and seven Gulf countries, would receive 15 staffers and $12.4 million in funding. The center's efforts "support the administration's priorities to fight terrorism in new and innovative ways," the document said.

The Treasury's office would also allocate $1.6 million and four more staffers to the Iran and Syria sanctions programs; $1 million and four new staffers to the Russia and Ukraine sanctions programs; and $859,000 and three more staffers to an inter-agency committee that reviews certain business deals for U.S. national-security threats.

In addition, the Treasury request calls for a $1.8 million increase in funding for the Financial Action Task Force, a Paris-based body that sets global standards on anti-money-laundering and counter-terrorism-finance rules.

The document said the U.S. was asked to lead the body in 2019, its first time doing so since 1996. An FATF spokeswoman confirmed that the U.S. will hold the rotating presidency from July 1, 2018 until the end of June 2019.

"This opportunity," the document says, "positions the U.S. exceptionally well to ensure that the FATF's strategic direction is in line with U.S. priorities for the organization." Those priorities include holding countries accountable for compliance failures, demonstrating the value of regulation and restricting budget increases, according to the request.

Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld.